The Confection Direction

Manufacturers strike big with shareable, snackable treats

On the nonchocolate side, American Licorice “recognized” that Red Vines and Sour Punch candy “may not have been as convenient to drop in your mouth, so we developed more bite sizes to fill that need,” says Madalyn Friedman, director of marketing for the Union City, Calif.-based confectioner.

These bite-size versions will come with new Fruit Vines, in a 10-ounce resealable bag set to launch in January, as well as with a new 9-ounce standup resealable bag for Sour Punch Bites, also debuting next year. There is not yet a standup/resealable bag developed for Red Vines.

Echoing the consumer trend for nostalgic flavors in unexpected places, Ferrero USA showed off its Summer Ice Pop Tic Tacs in the Cool New Products room at the NACS Show. Featuring red, white and blue pellets, the fruit-flavored candies take on the flavor of the ice-cream-truck favorite. Summer Ice Pop comes after the relaunch of Cinnamon Tic Tacs to the marketplace.

Prudent Innovation In 2010 more than 1,400 candy launches penetrated retail channels, but in 2012 that number dwindled to 765, according to Datamonitor. Chocolate led with 423 rollouts, while nonchocolate registered 302. Candy and snack items accounted for 26% of all new CPG introductions in 2012.

“As economic challenges continue, confectioners have become more thoughtful and conservative in their approach. Even with numbers down, we’ve seen a resurgence in sharable, resealable packages, and this trend is excelling due in part to the shift of consumer snacking habits,” says Ellek of NCA.

Tonnage declined due to the economy and “people focused on the staples,” says Friedman of American Licorice. “This is a relatively mature industry, and we must achieve true innovation—not just roll out new flavors to grow the business.”

“The U.S. innovation scale is tame compared to what confectioners offer in Japan and in the U.K., where they are pretty innovative with popping candy in the chocolate category,” says Mogelonsky of Mintel. “We are a lot more conservative, and you’ll notice that top brands do not switch positions very often.”

Industry experts stress that retailers must be careful not to overindulge in innovation lest they alienate customers who still want the tried-and-true products. “What candy brands people ate as kids still rule; it’s very evocative, so creating new brands is a challenge,” says Friedman. “The flipside is that there’s a lot of loyalty with evocative brands. We want to take our brands and continue building on them.”

Mogelonsky believes any type of new and exotic flavors that companies pursue probably won’t occur—or should not—in the resealable, sharable packages but rather smaller or traditional sizes that encourage trial. “The resealable pouches are meant to be shared by a group, and not everyone wants to share bacon and wasabi chocolate,” she says.

Musser of Rotten Robbie is just looking to breathe some new life into a category that needs a shot in the arm. She is eager for those new non-chocolate varieties, but cites other trends that could also contribute to growth. She says mobile apps could play a role, “where we can alert [customers] to candy couponing programs we offer. They get alerts on their phone and then come in to redeem them.”

At the store level, she says there will be more emphasis on mints and less on gum brands, which have suffered. Because of the drop in confection sales, the chain was forced to make some merchandising tweaks.

“We moved snack chips under the register in place of some gum and candy, and cut back on candy shippers,” says Musser. “We found that with candy at the counter, the turns were not as frequent, and it showed in dated product. With snack chips, the gross margin is lower than candy, but we see better turns.”